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Maharashtra Shops & Establishments Act 2017

27 December 2017

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The Central Government introduced 'The Model Shops and Establishment (Regulation of Employment and Condition of Services) Act 2016 (hereinafter referred as The Model Bill) on 29th June 2016 which has been one of the key asks of the Retailers Association of India for the overall benefit and growth of the Indian retail sector. The Model Bill is a progressive move by Shri Narendra Modi Government, since it enables states to choose to keep shops and other such establishments open 24×7 all through the year. This would give a substantial boost to employment generation and will also benefit the consumers in terms of more convenience and accessibility.

Subsequently, RAI started actively engaging and working closely with various State Governments for the adoption of the Model Bill.

The Government of Maharashtra has recently amended the Maharashtra Shops & Establishments Act 1948 in line with the Model Bill. The new bill - Maharashtra Shops and Establishments Act (Regulation of Employment and Conditions of Service) 2017 was published in the Maharashtra Government Gazette on 7th September 2017 after receiving the assent of the Governor of Maharashtra this year and the notifications were issued on 19th December 2017. Click here to download the Maharashtra S&E Act 2017

SALIENT FEATURES of the new Act:

Applicability: The New Act is applicable to establishments employing 10 or more persons. The provisions of the Existing Act are applicable to all establishments irrespective of the number of employees.

Facilitator: The New Act provides for the appointment of a "Chief Facilitator" and a "Facilitator" instead of an inspector as under the Existing Act. The facilitators shall advise the employer to comply with the Act of 2017, in addition to performing the duties of the inspector.

Exemptions: Section 3 of the New Act lists specifically 13 categories of establishments and workers who are exempted from its provisions. There is no provision for any other establishment to apply for exemptions.

The wider meaning given to the term Employer: The term "employer" under the Existing Act means a person owning or having ultimate control over the affairs of an establishment. The term "employer" has been given a wider meaning under the New Act and includes in the case of a company, a Director of the company.

Establishment: The New Act does away with the term "commercial establishment" and instead only provides for one head i.e. "establishment" which covers (among other things) any business, trade, manufacture, establishment of any medical practitioner, architect, engineer, accountant, tax consultant or any other technical or professional consultant, a society registered under the Societies Registration Act, 1860, a charitable or other trust, shop, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment; to whom the provisions of the Factories Act, 1948 does not apply, etc.

Registration for establishments employing 10 or more workers: An employer having 10 or more workers is required to register the establishment within 60 days from the date of commencement of the New Act or from the date on which the establishment commences its business by submitting an online application to the Facilitator of the local area concerned. As per Existing Act, it was within 30 days of commencement of establishment.

Intimation by establishments employing less than 10 workers: Establishments employing less than 10 workers are required to merely give an intimation of having commenced its business to the Facilitator by submitting the online application in the prescribed form. However, if at any point the number of workers in the establishment become 10 or more, then the employer of such establishment is required to obtain the registration certificate.

Labour Identification Number: On receipt of the online application the Facilitator will issue a registration certificate online along with the Labour Identification Number (LIN).

The validity of the registration certificate: The registration certificate will be valid for such period as may be requested by the applicant subject to a maximum period of 10 years as against 36 months under the Existing Act.

Opening & closing hours: The State Government has issued a separate notification to fix the opening and closing hours for different class of shops & establishments. Click here to download the notification. Subject to the said notification, other shops and establishments can remain open 24X7. A Shop or an establishment can be kept open for business on all days in a week provided every worker shall be allowed a weekly holiday of at least 24 consecutive hours of rest.

Prohibition of discrimination against women: The New Act prohibits discrimination against women in the matter of recruitment, training, transfers, promotion or wages. A woman can work only between 7:00 a.m. and 9:30 p.m. However, the woman employee with her consent will be allowed to work during 9:30 p.m. and 7:00 a.m. subject to adequate protection of their dignity, honour, and safety, protection from sexual harassment and transportation is provided to the doorstep by the employer as per the Act.

Interval of rest: Interval of rest has been reduced to 0.5 hours from the existing 1 hour after 5 hours of work under the New Act.

Spread-over: The spread-over of a worker in the establishment has been reduced to 10.5 hours in any day, as against 11 hours under the Existing Act.

Overtime: Overtime cannot exceed 125 hours in a period of 3 months as against 6 hours in a week under the Existing Act.

Identity card: The employer is required to furnish to every worker an identity card with details like date of joining, Aadhar Card No. etc.

Leave: A new provision has been introduced, which entitles every worker to 8 days of casual leave in a year, which will lapse if it is not availed at the end of the year. Every worker who has worked for a period of 240 days or more will be allowed leave with wages at the rate of 1 day for every 20 days of work performed during the previous year. Under the Existing Act every employee who worked for not less than 240 days during a year, irrespective of the date of commencement of his service, is allowed leave for a period of not less than 21 days.

Accumulation of leave: A worker can accumulate earned leave up to a maximum of 45 days as against 42 days under the Existing Act. Furthermore, the worker is allowed to encash leave in excess of 45 days, if the employer refuses to sanction the leave.

Festival holidays: The workers are now entitled to 8 festival holidays in a calendar year namely 26 January, 1 May, 15 August, 2 October and four such other festival holidays as may be agreed between the employer and the workers.

Welfare measures: Welfare measures such as first aid, canteen, drinking water, latrines and urinals, crèche facility have been introduced. Establishments employing 100 or more workers are required to provide and maintain a canteen for the use of its workers. Every establishment employing 50 or more workers shall provide and maintain a crèche within a radius of 1 kilometer. The state will issue appropriate guidelines in this regard.

Electronic records and registers: Employers can maintain registers and records electronically. Existing Act did not have the facility of maintaining record Electronically but on the visit of Facilitator hard copies to be provided for verification.

Penalty: The penalty for contravention of the New Act and the rules have been enhanced to INR 100,000 and in case of continuing contravention an additional fine which may extend to INR 2000 for every day during which the contravention continues. Further, for repeat offenders, the fine may extend to INR 2,00,000. The Existing Act provides for a minimum fine of INR 1,000 and a maximum fine of INR 5,000.

RAI welcomes the initiative taken by the Maharashtra Government and is committed to working with other state governments to ensure hassle-free adoption and believes that the new act will provide a big boost to ease of doing business in the state and assist the retail industry in Maharashtra to achieve new heights.

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Retailers Association of India (RAI) is the unified voice of retailers in India. A not for profit organization, RAI works with all stakeholders for creating the right environment for the growth of modern retail industry in India. Read More.